ZMDC makes $67 million profit but results three years behind

Zimbabwe Mining Development Corporation (ZMDC), the state-owned mining investment vehicle, registered a 32 percent fall in after tax profit to $67 million in the full-year to December 2012 compared to $98.5 million in 2011 due to start-up costs of new ventures.

Zimbabwean state owned enterprises, most of which rely on public funds, are typically tardy in producing financial accounts, if they do at all.

In its 2012 annual report which was released last week, the parastatal’s former chairman and now ministry of mines secretary, Francis Gudyanga, said revenue increased by 10 percent from $279.6 million to $307.4 million due to higher gold price, marginal growth in gold output and increased diamond sales from its 50 percent-owned subsidiaries, Diamond Mining Corporation (DMC) and Mbada Diamonds.

“Jena Mines contributed positively towards revenue growth. There were no sales from Sandawana Mines and Elvington Mine due to emeralds market constraints and non- production of gold respectively,” he said.

In the period under review, ZMDC’s operating expenses increased by 42 percent from $152.6 million to $217.3 million.

Gudyanga attributed the rise in operating expenses to increased operating costs at Marange Resources and Jinan.

“In line with the corporation’s mandate to invest in the mining sector on behalf of government, the group invested $92.7 million in capital expenditure compared to $100.9 million invested in the previous year.

“The capital expenditure was mainly incurred on mining assets, property, plant and equipment and exploration work,” he said.

ZMDC paid a $19.3 million dividend in the period under review.

Gudyanga noted that the performance of the group was satisfactory considering the challenges that were encountered during the period.

“The favourable operating environment is expected to continue into 2013 and the corporation is expected to realise better results from increased capital expenditure incurred in the past two years.  The removal of ZMDC from the EU sanctions at the end of 2013 is expected to result in better pricing for Chiadzwa diamonds going forward,” he added.

ZMDC has mining interests in gold, diamonds, graphite, platinum and asbestos, among other minerals. Its interests in diamond mining include 50 percent shareholdings in Mbada Diamonds, Diamond Mining Corporation, Jinan. It wholly owns Marange Resources  and Kusena Diamonds and 10 percent of Anjin Investments.-The Source

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